DIRK INDIA PVT LTD Vs. MAHAGENCO

JUDGEMENT

(1.) The respondent has constructed a thermal electric power generation plant, (for short "the power plant") at eklahare, Nashik. Coal is used for firing boilers. Ash generated by burning of coal, known as fly ash released in the air is a potential health hazard. At one point of time, fly ash was regarded merely as an industrial waste, requiring proper care and attention for its disposal. On 14th September 1999, a notification was issued by the government of India in the Ministry of Environment and Forest inter alia setting out guide-lines for the disposal of the fly ash. Fly ash, which at one time was merely an industrial waste, appears to have become saleable bye produce on account of new technology alleged to be developed by the petitioner. Fly ash is used as a raw material for the production of a substance called "pozzocrete" used for surfacing roads which reduces use of cement concrete and strengthens and increase life of roads.

(2.) On 4th October, 2002 an agreement was executed between the petitioner and the maharashtra State Electricity Board, the predecessor in title of the respondent, under which the respondent agreed to supply to the petitioner the Pulvarized Fly Ash (hereinafter referred to as the "pfa") on the terms and conditions mentioned therein. Under the agreement, the petitioner was to construct a plant for the manufacturing of Pozocrete on a portion of the land, to be leased to it by the respondent, on the site of power plant. The pfa generated was to be supplied by the respondent to the petitioner for manufacture of Pozocrete. Under Clause 3. 1 of the agreement, the petitioner was to erect four "hoppers" for the collection of PFA within the precincts of the power plant. Under Clause 3. 2 the respondent was to deliver the PFA to the petitioner by depositing the same into said four Hoppers, to be constructed by the petitioner. The petitioner had agreed to receive and take a minimum quantity of 1000 metric tonnes of PFA per day for the initial period of 12 months and had agreed to take minimum quantity of 3000 Metric Tonnes per day during the remaining period of 29 years. The agreement for the supply was valid for 30 years. The respondent agreed to grant on lease to the petitioner suitable site for erection of Pozocrete plant and also for construction of four Hoppers and other incidental use.

(3.) The land offered by the respondent to the petitioner in terms of the agreement for the construction of Pozocretes plant was discovered to be forest land within the meaning of Forest Conservation Act 1980. On account of it, there was a delay in the construction of the Pozocrete plant and petitioner was able to erect only one out of four Hoppers, promised by it. Disputes arose between the parties, on this count. According to the petitioner, the respondent had agreed to deliver the PFA at the Hoppers and the responsibility of the delivery i. e. to say, carrying of the pfa from the power plant to the Hoppers was that of the respondent, while according to the respondent PFA was required to be delivered not at the site of the Hoppers but the petitioner required to collect the PFA from the Power Plant to the Hoppers. There were also disputes between the parties relating to the cost of construction of the conveyer system for carrying the PFA. More serious dispute arose between the parties on account of claim of the respondent that petitioner was not lifting the entire amount of PFA generated at the Power Plant. The PFA generated if not collected immediately, would cause health hazard and environmental problems. According to the respondent, it may be required to close down of the power plant, if the PFA was accumulated and escaped in the air. The respondent alleged that the petitioner was committing breach of the agreement and exposing it to the threat of action by the Pollution Board on account of non collection of the PFA generated. According to the respondent, in order to protect it from any action at the hands of environmental protection authorities in future, it was therefore required to sell a part of the PFA to outside contractors.